Former Lehigh County Jail doctor admits evading taxes and loans

PHILADELPHIA — The former Lehigh County Jail doctor who claimed to be a minister in a Utah-based religious group to avoid paying taxes and long overdue loans for medical school pleaded guilty Monday to numerous charges stemming from the scheme.

Dennis Erik Fluck Von Kiel, as his name appears in court documents, admitted in a hearing before U.S. District Judge Jeffrey Schmehl that he took steps to keep his money out of the government's reach while continuing to collect government benefits for himself and his family.

Under his plea agreement with federal prosecutors, Von Kiel, 58, of Lynn Township, would serve nearly 31/2 years in prison and would be required to repay about $600,000 to the federal government and surrender $166,000 he attempted to hide from investigators.

Assistant U.S. Attorney Mark Dubnoff said Monday that Von Kiel declared himself a minister in the International Academy of Lymphology and took a vow of poverty before directing his paychecks to be deposited in an account controlled by a co-conspirator in Utah.

He said the co-conspirator, who faces trial in Reading next month, would then wire almost all of the money into an account that Von Kiel controlled.

"Von Kiel used the account to pay his family's day-to-day living expenses and to buy some unusual items, such as a batting cage for a son, all while purportedly living under his vow of poverty," Dubnoff said.

Von Kiel's admissions are a change for the doctor, who has been defiant despite his pursuit by several government agencies since 1999, when the government first won a judgment in its effort to collect federally backed loans now worth $175,000 that he used to finance his education at the Philadelphia College of Medicine.

When prosecutors first filed charges in the tax evasion scheme last February, they alleged that Von Kiel was preparing to flee to Central America or Ecuador, where he had discussed buying a banana plantation.

Court documents say in December 2013 Von Kiel and his wife, Insa Von Kiel, sold the Lower Macungie Township home he previously transferred into her name for $1. They took a check for the proceeds to a Harrisburg-area check-cashing shop and walked out the door with large bags of cash totaling more than $150,000, the records say.

During a bail hearing in July, a jailhouse informant testified Von Kiel discussed assassinating a federal judge who had ordered him to pay his debts, and getting a high-quality scope installed on his Yugoslavian-made rifle.

But in contrast to his confident appearance and about two dozen supporters who filled the courtroom during the bail hearing, Von Kiel on Monday sat next to his attorney with his head down in a courtroom empty except for court staff and federal agents.

He spoke only to say he intended to plead guilty and was concerned about being housed in a county jail while he awaits his April 20 sentencing.

Defense attorney Michael Engle said Von Kiel decided to plead guilty after evaluating the evidence in the case.

"It was a pragmatic decision that the sentence that was negotiated was one that allowed him to move forward with his life," Engle said.

If Von Kiel had gone to trial and was convicted of each of the 17 charges he faced, the maximum sentence could have been 108 years and nearly $2.9 million in fines.

Prosecutors said Von Kiel lied about his income and marital status to help his four oldest children obtain federal grants totaling $36,000 for their education.

He also was charged with attempting to collect Social Security disability benefits by persuading another doctor to write letters in support of his claim that he suffers post-traumatic stress disorder and could not work.

Von Kiel worked as Lehigh County Jail's medical director from 1989 until 2004. when the county entered a contract with PrimeCare Medical, a Harrisburg-area company that provides health care services in county jails around the state.

Von Kiel was hired by PrimeCare and continued overseeing medical services at Lehigh County Jail and several others around the state.

He directed his salary to be paid to the International Academy of Lymphology, and later to an limited liability company called the Christian Forum Assembly, according to court papers. At Von Kiel's instruction, PrimeCare did not withhold any tax.

Robert Wray, the alleged co-conspirator in Utah who is charged separately, would wire all but $240 of each of Von Kiel's paychecks to an account in the name of True Life Ministries, which Von Kiel controlled, according to court papers.

Wray, who is charged with 32 counts including conspiracy to defraud the government, wire fraud and aiding and abetting bankruptcy fraud, allegedly held himself out as an "attorney at lawe [sic]," telling Von Kiel and others that he was an attorney when he was not.

According to the indictment against Wray, he controlled the International Academy of Lymphology account where Von Kiel had his PrimeCare salary deposited and helped Von Kiel incorporate and set up accounts for the Christian Forum Assembly.

When the U.S. Department of Health and Human Services began legal action to garnish Von Kiel's wages in 2008, Wray allegedly wrote a letter on Von Kiel's behalf threatening a countersuit and claiming the money belonged to a church, the indictment says.

When the department won a court order directing Von Kiel to pay 25 percent of his wages toward his student loan debt, Von Kiel filed for bankruptcy. Wray allegedly made statements in Von Kiel's support, including that he was an attorney and that Von Kiel had paid his student loan debt, the indictment says.

Von Kiel also was charged with lying during a bankruptcy hearing about his real estate interests, saying he had not recently owned property when he had actually transferred ownership of his home to his wife.